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Improving Economic Conditions Keeps Demand Stable in Single-Detached Home Segment

Improving economic conditions helped keep demand stable in the single-detached home segment. A drop in apartment starts was a main factor in the slow down which is looked at by some as a smart move.

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Housing starts in the capital trended down for the fourth straight month, the Canada Mortgage and Housing Corporation said Wednesday.

A drop in apartment starts was a main factor according to CMHC senior analyst Anne-Marie Shaker.

“Instead of starting new high-rise projects, builders are channelling resources to finishing projects that were started earlier and the number of apartments under construction has been declining noticeably,” Ms. Shaker said in a statement, adding that improving economic conditions helped keep demand stable in the single-detached home segment.

Housing starts trended at 4,412 in May, compared with 4,804 in April.

The trend is a six-month moving average used to complement the seasonally adjusted annual rates by accounting for considerable swings in the SAAR measure.

May’s SAAR was 5,877, up from 3,808 in April.

The CMHC said the pace of housing starts slowed last month across the country as well.

The seasonally adjusted annual rate for May came in at 188,570 units for the month, down from 191,388 in April.

The six-month moving average of the seasonally adjusted annual rate was 191,000 in May compared with 194,950 in April.

The pace of urban starts slowed by 2.5 per cent in May to 170,432 units as multiple-unit starts fell 5.7 per cent to 110,834 and single-detached starts increased 4.2 per cent to 59,598.

The annual pace of urban starts fell in British Columbia and the Prairies, but increased in Ontario, Atlantic Canada, and Quebec.

Rural starts were estimated at a seasonally adjusted annual rate of 18,138 units.

Meanwhile, Statistics Canada says the value of building permits issued by municipalities fell 0.3 per cent to $6.9 billion in April, the second consecutive monthly move lower.

The agency noted the drop was due to lower construction intentions in Ontario, Quebec and Nova Scotia.

Statcan says the value of residential permits fell 1.8 per cent to $4.3 billion in April as the permits for multi-family buildings fell 6.2 per cent to $1.9 billion, while single-family buildings gained 1.8 per cent at $2.5 billion.

Non-residential building permits climbed 2.5 per cent to $2.5 billion in April as institutional building permits gained 15.4 per cent at $695 million and commercial permits added 2.5 per cent at $1.5 billion. Industrial building permits fell 16.5 per cent to $346 million in April, the lowest level since October 2013.

- with files from the Canadian Press

Source: Ottawa Business Journal, OBJ Staff, 8 June